It appears that you are using either an older, classic Web browser or a hand-held device that allows you to view our content but may not work with every feature of our site. If you are using an older browser, please upgrade for the best experience.

Dec. 7, 2010: high-rise buildings in the Pudong New Development Zone in Shanghai, China. Never before have China, India and other developing economies grown so much faster than the United States, Japan and the rich countries of Europe.AP Photo

"U.S.-China Relationship: A Shift in Perceptions of Power"

One should be skeptical about dire projections of China's rise and America's decline. China still has a long way to go to catch up in military, economic and soft-power resources.

Last year, when China broke off military-to-military talks following the Obama administration's long-expected sale of defensive arms to Taiwan, a high American official asked his Chinese counterpart why China reacted so strongly to something it had accepted in the past. The answer: "Because we were weak then and now we are strong." On a recent visit to Beijing, I asked a Chinese expert what was behind the new assertiveness in China's foreign policy. His answer: "After the financial crisis, many Chinese believe we are rising and the U.S. is declining."

These Chinese are not alone. A recent poll shows there are more Americans who believe China will be the dominant power in 20 years than believe the United States will retain that position. Some analysts go further and argue that China's rise will result in a clash similar to that between a rising Germany and a hegemonic Britain that led to World War I a century ago.

One should be skeptical about such dire projections. China still has a long way to go to catch up in military, economic and soft-power resources. In contrast, by 1900, Germany had surpassed Britain. Even if Chinese gross domestic product passes that of the United States at some point in the 2020s, the two economies would not be equal. China would still have a vast underdeveloped countryside, and it would almost certainly have begun to face demographic problems and slowing economic growth. As some Chinese say, they fear they will grow old before growing rich. China is a long way from posing the kind of challenge to America that the Kaiser's Germany posed when it passed Britain.

But many Chinese do not see the world this way. They believe that the recession of 2008 represented a shift in the balance of world power, and that China should be less deferential to a declining United States. This overconfident power assessment has contributed to a more assertive Chinese foreign policy in the last two years. The shift in perceptions seems to have emboldened the Chinese government, even though the judgment is wrong.

For years, China followed the advice of Deng Xiaoping to keep a low profile. However, with its successful economic recovery from the recession and 10% growth rate, China passed Japan as the world's second-largest economy last year, and many in China pressed for a stronger foreign policy. Some blame this on President Hu Jintao, but that view is too simple. The top leaders still want to follow Deng's strategy of not rocking the boat, but they feel pressured from below by rising nationalism, both in the bureaucracy and the blogosphere.

China's new assertiveness affected its relations with others besides the United States. Its policies in the South China Sea created fear among countries in the Assn. of Southeast Asian Nations, and its overreaction to Japan's actions after a ship collision near the disputed Senkaku islands led Tokyo to reaffirm its alliance with Washington. Beijing alienated South Korea by failing to criticize North Korea's shelling of a South Korean island, irritated India over border and passport issues, and embarrassed itself in Europe and elsewhere by overreacting to the Nobel Peace Prize granted to jailed dissident Liu Xiaobo.

How will these issues play out in the coming year? It is likely that China's leaders will draw back somewhat from the overly assertive posture that has proved so costly. Hu's stated desire to cooperate on terrorism, nonproliferation and clean energy should help reduce tensions, but powerful domestic interest groups in export industries and the People's Liberation Army want to limit economic and military cooperation. And most important, given the increasing nationalism of the Chinese people that one sees on display in the blogosphere, it will be difficult for top Chinese leaders to change their policies dramatically. Hu's state visit to Washington in January helped improve matters, but the relationship will remain difficult as long as many Chinese suffer from hubris based on nationalism and a mistaken belief in American decline.

Given that China and the United States face global challenges such as financial stability, cyber security and climate change, the two countries have much to gain from working together. Unfortunately, faulty power assessments have created hubris among some Chinese, and unnecessary fear of decline among some Americans, and these shifts in perception make cooperation difficult. Any American compromise is read in Beijing as confirmation of American weakness. But with more realistic projections and policies, China and America need not repeat the disastrous experience of Germany and Britain a century ago.

Joseph S. Nye Jr. is a professor at Harvard's John F. Kennedy School of Government and author of "The Future of Power."